Direct Selling Legal Update – June 2019

Welcome to the June 2019 edition of the Addisons Direct Selling Legal Update.

Our Legal Update contains papers published recently by Addisons concerning various issues and developments impacting upon the direct selling sector in Australia. Areas covered include new obligations in respect of regulatory and compliance matters, as well as new requirements of which marketing teams should be aware.

Regulatory & Compliance

New Modern Slavery Reporting Requirements in Australia – Is Your Direct SellingBusiness Prepared?

On January 1 2019, the Modern Slavery Act 2018 (Cth) (the MSA) came into effect.

The MSA requires reporting entities to prepare annual Modern Slavery Statements, which will be recorded on a register and accessible publicly. The MSA establishes a reporting framework that requires all relevant Australian businesses (including Direct Selling Organisations (DSOs)) to identify modern slavery risks in their operations and supply chains, and to implement appropriate measures to ensure identified risks are lessened or remediated, as necessary.

Our paper looks at DSO compliance obligations.

Time to Whet your Whistle

Sailing through parliament, the impending whistleblower amendments are due to commence on 1 July 2019. But stormy seas abound for public and large proprietary companies, who will be required to amend their existing whistleblower policies to comply with the new legislation. In this paper, we look at what steps must be taken to comply with the new whistleblower requirements.

Permitted Indications in respect of Listed Complementary Medicines in Australia

Significant legislative changes have recently been made to the Therapeutic Goods Act 1989 in respect of the regulation of complementary medicines in Australia. In this paper, we consider the changes relating to indications that are permitted for use in respect of complementary medicines listed on the Australian Register of Therapeutic Goods and, in particular, the deadline for making various changes of which direct selling companies should be aware.

Australian Industrial Chemicals Introduction Scheme – Big changes on the way for the regulation of chemical ingredients in cosmetics

Wide-reaching legislative changes are underway in relation to the regulation of industrial chemicals in Australia. A new regulatory scheme, the Australian Industrial Chemicals Introduction Scheme (AICIS), will commence on 1 July 2020, which will replace and simplify the current National Industrial Chemicals Notification and Assessment Scheme (NICNAS). On the same date, a ban will commence on the use of new animal test data for ingredients which are only used in cosmetics.

Our paper provides an overview of the requirements.

Australian Competition & Consumer Commission

Recent ACCC action sounds the alarm on one-way indemnities and limits on liability in small business contracts

A recent media release by the ACCC has shed further light on the ACCC’s view of what is “fair” when it comes to indemnities and limitations on liability in standard form small business contracts. This most recent development in the ACCC’s active campaign against unfair contract terms suggests companies need to tread very carefully to ensure that any indemnities and limitations on liability in their small business contracts (such as independent contractor agreements with distributors) are fair and not in breach of the Australian Consumer Law. In this paper, we look at the ACCC’s particular concerns.


Unilever all in a sweat over new player’s ‘clinical’ efficacy claims

The Federal Court recently examined whether representations alleged by Unilever to have been made by Beiersdorf about Beiersdorf’s Nivea ‘Stress Protect Clinical Strength’ deodorant were false, misleading or deceptive under the Australian Consumer Law. Whilst Unilever was ultimately unsuccessful, our paper considers how this case provides useful guidance on the use of the term ‘clinical’ as a product descriptor and what sort of scientific substantiation is required to support a ‘clinical’ claim.

Trade Promotions: what direct selling businesses should consider before conducting a promotion in Australia

A trade promotion is an activity conducted for the promotion of trade, a business or the sale of goods and services. Trade promotions include competitions, sweepstakes, contests and giveaways and are a popular way of marketing direct selling businesses and their products.

Do you know what steps are required to ensure your promotion complies with applicable requirements?

Is your Direct Selling business compliant with the new Therapeutic Goods Advertising Code (No. 2) 2018?

A new Therapeutic Goods Advertising Code (No. 2) 2018 (new TGAC) took effect on 1 January 2019. This impacts materially the way in which direct selling businesses may advertise their therapeutic goods. This Focus Paper looks at some of the more significant changes and the Therapeutic Goods Administration’s compliance and enforcement strategy for 2019.

We hope that you find items of interest in this edition of our Addisons Direct Selling Legal Update. If you have any queries or would like to provide feedback or discuss, please do not hesitate to contact any of Addisons’ Direct Selling team.

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